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The Week In Cannabis: GrowGeneration's Spike, Big Earnings, Stocks In Decline, And Dutchie's Funding

Despite cannabis stocks being mostly in the red this week, GrowGeneration Corp (NASDAQ: GRWG) managed to close in the green, with gains of 24%. This still meant giving up some of the gains accrued between Aug. 12 and Aug. 19.

Benzinga · 08/21/2020 20:38

Despite cannabis stocks being mostly in the red this week, GrowGeneration Corp (NASDAQ:GRWG) managed to close in the green, with gains of 24%. This still meant giving up some of the gains accrued between Aug. 12 and Aug. 19.

The rally started last Friday when the grow supplies company reported its second-quarter financial results, establishing a new revenue record for the tenth consecutive quarter.

GrowGeneration continued to spike on Monday after Jim Cramer interviewed CEO Darren Lampert on CNBC, describing its business model as the “most exciting” he’s seen in retail.

Following a five-day rally, GrowGeneration’s stock hit a peak of $22.30 on Wednesday, and commenced a small decline as excitement around its earnings wore off and some investors looked to take profits. On Friday, shares took a dive of more than 9% after Hindenburg Research published a report arguing the “Euphoric Retail Stock Has The Brightest Management Red Flags” that analysts have “ever seen,” saying downside surpasses 70%.

In an email to Benzinga, GrowGeneration president Michael Salaman said the company will be responding to the short report soon, and encouraged investors to rely on the Aug.13 earnings release.

Read all about this story, including commentary from Alan Brochstein, founder of New Cannabis Ventures, following this link.

Among notable earnings reports this week was one out of Helix Technologies Inc. (OTC:HLIX), which posted a second-quarter revenue increase of 20% to $5.4 million, with overall gross profit of $4.7 million.

CFO Scott Ogur told Benzinga, “In a market where it seems that ‘profits’ is a 4 letter word, we are proud to buck the trend and become the first competitor in the space to post positive Adjusted EBITDA.  The entire team has worked incredibly hard to maximize the ROI on every dollar spent and gone above and beyond to deliver superior value to clients and shareholders.”

Also reporting earnings were TerrAscend Corp. (CSE:TER) (OTC: TRSSF), which saw a 169% year-over-year spike in sales, Vibe Bioscience Ltd. (CSE:VIBE), Delta 9 Cannabis Inc. (TSX:DN) (OTC: VRNDF), Avicanna Inc (TSX:AVCN) (OTC:AVCNF), Curaleaf HoldingsInc. (CSE:CURA), Halo Labs Inc.(NEO: HALO) (OTCQX:AGEEF), Endexx Corp. (OTC:EDXC), and Canopy Rivers Inc. (TSX:RIV) (OTC: CNPOF). See all details on these results on Benzinga Cannabis’ Earnings Center.

ETFs were down this week. Over the five trading days of the week:

  • The ETFMG Alternative Harvest ETF (NYSE:MJ): lost 2.9%
  • The AdvisorShares Pure Cannabis ETF (NYSE:YOLO): was down 2.7%
  • The Cannabis ETF (NYSE:THCX): tumbled 2.9%.
  • The Amplify Seymour Cannabis ETF (NYSE:CNBS): was flat.
  • The SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.77%.

Benzinga Cannabis’ content is now available in Spanish on El Planteo.

On Tuesday, Benzinga hosted its second Virtual Benzinga Cannabis Capital Conference, featuring speakers like NBA stars Isiah Thomas and Al Harrington, former Detroit Red Wing Darren McCarty, Super Bowl Champion Marvin Washington, Tommy Chong, CJ Wallace, Willie Mack, Kim Rivers, Abner Kurtin, Andrew Brisbo, Hilary Black, and many more.

Read the conclusions:

E-commerce company Dutchie completed a $35 million Series B funding round, with backing from Snoop Dogg's Casa Verde Capital, Kevin Durant's Thirty Five Ventures andFormer Starbucks Chairman and CEO, Howard Schultz.

Thrive Capital and Gron Ventures also participated in the effort. The venture capital round brings Dutchie's total funding to $53 million.

Benzinga announced that it has partnered with the Last Prisoner Project (LPP), a coalition of cannabis industry leaders, executives and artists dedicated to bringing restorative justice to the cannabis industry.

TILT Holdings Inc. (OTC:TLLTF) appointed Dia Simms to its board of directors. Simms, a protégé of entertainer Sean Combs and former president of Combs Enterprises, replaces founding board member Gary Smith.

Athletes for CARE recently hired Clint Johnson, former football player for the Atlanta Falcons (NFL), Edmonton Eskimos (CFL) and Notre Dame. Johnson will be the organization's Director of Development.

Kadenwood acquired EcoGen Laboratories, a manufacturer specializing in hemp-derived CBD. The price tag of the deal was not disclosed.

The Multidisciplinary Association for Psychedelic Studies, a non-profit working to legalize the psychedelic MDMA for assisted psychotherapy, announced Thursday that it has raised the $30 million necessary to complete phase 3 trials and achieve FDA approval for the drug.

On the policy front, Maine will debut its adult-use cannabis sales on October 9.  “Maine is the next state to plant its flag in the recreational market. While it probably won't do the massive numbers of Illinois, the companies that are vying for licenses will probably do quite well. Being the biggest isn't the thing anymore, but owning a smaller market will be,” Debra Borchardt, Editor-In-Chief of Green Market Report, told Benzinga.

In Argentina, the province of Santa Fe passed an ordinance establishing the legal framework for patient access to, and research of medical cannabis.

CBD watchdog Leafreport released a report on CBD beverages in the U.S. The firm found significant inaccuracies in the amount of CBD contained in each product, versus the product label.

Of the 22 CBD beverages tested at an independent lab, 54% (12 products) contained less CBD than advertised, while two products contained no CBD at all.

Only 18% of tested drinks (four products) had CBD levels within 10% of the claimed amount. 64% of beverages (14 products) had CBD levels that were more than 40% higher or lower than what the label claimed.

“CBD is still an unregulated industry so we're committed to helping consumers weigh through all of the information out there to make informed decisions on what they buy; we conduct these tests to hold brands accountable to their labeling and to educate consumers,” said Lital Shafir, head of product at Leafreport.

Global cannabis company Parallel announced a strategic partnership between the company's Surterra Wellness brand and Florida cannabis educational organization, Cannabis LAB (Law, Accounting & Business). Over the next year, the two parties will work together to develop a comprehensive lineup of cannabis industry educational and professional development programming ranging from podcasts, speaker series and other initiatives that will facilitate professional development in the Florida market.

"Through Parallel's partnership with Cannabis LAB, we are able to offer industry professionals career development opportunities, which will continue to build Florida's vibrant cannabis market. We are passionate about creating experts equipped with the most competitive insights and knowledge, but we are equally focused on developing cannabis professionals who can help Floridians live their best lives,” said Liz Conway, president of Parallel for Florida, told Benzinga.

Mota Ventures is rebranding under a new name: Thoughtful Brands, Inc. The rebranding comes on the heels of significant milestones for the Vancouver BC-based company, including the acquisition of direct to consumer brands Golden Path and Wild Mariposa; European expansion; and inroads in the research and development of psychedelic-derived medicines to treat addictions. 

Global ERP software company 365 Cannabis announced new technology integrations with independent software vendors Continia, Cannabis OneFive, and Insight Works. These partnerships provide added value for industry operators utilizing the 365 Cannabis software, no matter their geographical location. The new add-ons expand ERP functionality and optimize expense, quality management and warehouse needs.

"The 365 Cannabis roadmap is based on customer feedback — we take into consideration what our customers want and need out of their ERP system," Michael Kiehn, VP of sales and marketing, told Benzinga. "We integrate with dozens of cannabis-specific and non-cannabis business management tools alike to provide the most robust ERP for the cannabis industry.”

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

Top Spanish stories:

Lead image by Ilona Szentivanyi. Copyright: Benzinga.